Address Quality Tools & New Requirements to Improve Mail Delivery Baltimore PCC April 27, 2007

1. Address Quality Tools & New Requirements to Improve Mail DeliveryBaltimore PCCApril 27, 2007 Darron K. Holland Marketing Specialist Direct Mail / Product Management

2. Today’s Agenda • Making the Case for Address Quality • Reviewing New Addressing Requirements • Putting It All Together

3. Address Quality • Affects your ability to reach your valued customers • Depends on accurate addresses with complete,correct, and current address elements • Allows automated sortation • Not dependent on carrier knowledge JOHN DOE2200 CLARENDON BLVD STE 1000ARLINGTON VA  22201-3381

4. Poor Address Quality Results In Increased Acquisition Cost • Missed customers • Multiple attempts • Lower response rates • Wasted production cost & Wasted postage • Lost discounts Lower Customer Lifetime Value • Investment in customers • Repeat purchases • Value of customer retention

5. Four Basic Address Quality Questions • What Are You Doing Now? • What Should You Be Doing? • Why Does It Matter? • How Can You Succeed?

6. What Are You Doing Now? • Address List Management • Purchase • Rent • In house (Building/Maintaining) • Verifying address quality? • Accepting current response rates? • Worrying about your postage costs?

7. New York New Jersey Pennsylvania America is on the Move and Growing! 41 million Americans move 145 million total addresses 1.8 million new addresses

8. UAA Mail Study Return 51.3¢ / pc. 1.60 Billion pieces $822.5 Million 9.724 Billion pieces $1.856 Billion Old address x Forward 21.3¢ / pc. 1.985 Billion pieces $421.9 Million Waste 4.4¢ / pc. 6.136 Billion pieces $269.8 Million New Address PRC LR-L-61 for R-2006-1 Rate Case (Christiansen UAA Study –Table 3.1)

9. The Address Quality Equation Physical Address Quality + Move Update Quality = Deliverable Mail It Just Adds Up!

10. What Should You BeDoing? • Insist on high standards from suppliers • Manage your address files • CASS™:ZIP+4® /LACSLink™/DPV™ Cass Certified™ Address Matching Software / Locatable Address Conversion System / Delivery Point Validation • AEC I & IIAddress Element Correction I & II • NCOALINK™National Change of Address Link • ACS™/OneCodeACS™Address Change Service

11. Why Does It Matter? • BECAUSE it impacts your: • Costs • Postage • Response Rates • R.O.I. It’s Your Bottom Line!

12. How Can You Succeed? • Implement a comprehensive address quality strategy • Utilize available addressing products and services • Track your mail channel’s R.O.I.

13. Direct Mail Costs Creative 11.25¢ Postage 23¢ Art & Preparation 9.75¢ Allocated Fees 13.55¢ Printing Production 33.76¢ Lettershop Production 4.02¢ Mailing Lists 12.35¢ Computer Processing 2.32¢ DMA Statistical Fact Book 2005

14. How Can You Succeed?

15. TM ACS TM ANKLink TM NCOALink TM AEC / AEC II DPV TM TM LACSLink What Should You Be Doing? Update Correction Validate Standardize CASS™ZIP+4® Codes

16. A Strategy to Improve Your R.O.I. Addressing Products that Can Make a Difference • CASS Certified™ Address Matching Software: ZIP+4/LACSLink™/DPV™ • Address Element Correction I & II (AEC I & II) • National Change of Address Link (NCOALINK™) • ACS™/ OneCodeACS™

17. CASS™ (Coding Accuracy Support System) ZIP + 4® • USPS certified benchmark • Sets minimum performance standards for commercial ZIP + 4®address matching software • Must pass USPS test for CASS-certification • ZIP + 4 address matching software attempts to match addresses against range-based records on USPS ZIP + 4 fileExample: 100-110 MAIN ST ANYTOWN TN 38138-6038

18. CASS™ LACSLink™ (Locatable Address Conversion System) • Integrated into CASS Certified™ Address Matching Software • Updates rural-style addresses to city-style format due to 911 emergency purposes • Updates existing city-style address that have been renamed or renumbered • 5 million converted addresses

19. CASS™ DPV™ (Delivery Point Validation) • Extension of ZIP + 4® CASS-certified Address Matching software • Available through software vendors • Enables ZIP + 4 Coding & identifies potentially undeliverable addresses • DPV - Extra step to attempt validation of each specific address in the file Example: 100 MAIN ST ANYTOWN TN 38138-6038Confirmed 104 MAIN ST ANYTOWN TN 38138-6038Not Confirmed

20. Address Element Correction (AEC Service Level I & II) • USPS provided service for all customers • Resolves physical address deficiencies • Submitted on electronic media to USPS • AEC I Cost - $15.00 per thousand • Average correction rate - 35% • AEC II™ Cost - $0.25 per record • Average resolution rate - 75%

21. National Change of Address (NCOALINK™) • USPS licensed product • Pre-Mailing Process • Provides electronic Change-of-Address information • Variable costs • Average correction rate - 5.51%

22. ACS™/ OneCodeACS™ • USPS Service • New OneCodeACS automated option • Leverages Intelligent Mail Barcode • Post-Mailing Process • Current Pricing • Manual (hardcopy) .75¢ • ACS Electronic .21¢ • OneCodeACS Automated First-Class Mail (ltrs only) .21¢

23. ACS™/OneCodeACS™Current & Future Rates   Address Correction Service Current Future • Manual, each $0.75 $0.50  • ACS Electronic • First-Class Mail® 0.21  0.06  • Other 0.21  0.25 • OneCodeACS™ (Letters Only)     • First-Class Mail - First 2 notices, each 0.21 Free - Additional notices, each 0.21 0.05 • Standard Mail (Fall 2007) - First 2 notices, each N/A  0.02 - Additional notices, each N/A  0.15

24. New Addressing Requirements

25. The Goal • PMG has called for a 50% reduction in UAA mail by 2010 Effective August 1, 2007 • All CASS/MASS certified ZIP+4 software will incorporate DPV Primary Number Confirmation as a Standard Process

26. New CASS RequirementCurrent CASS/MASS ZIP+4 Process • Assigns +4 Codes using range-based matching • Does not discern if address is valid delivery point

27. New CASS RequirementZIP+4 Process Example • Mailer Address: 123 Mail Street Anytown, NY 12345 • Matches to USPS record: 121-129 Main Street, Anytown NY 12345-3356

28. New CASS RequirementDPV Process Example • Mailer Address after ZIP+4 match: 123 Mail Street Anytown, NY 12345-3356 • After the ZIP+4 match DPV will check if the Primary Number 123 exists within the range (121-129) • Yes - +4 code is retained and address returned • No - +4 code is removed and address returned

29. DPV Return Codes

30. New CASS RequirementZIP+4 Vendor Requirements Today: DPV is an optional processing feature Tomorrow: DPV Primary Number confirmation will be required

31. New CASS RequirementMailer Requirements • No change • Automation Rate Qualification requires the use of CASS-certified ZIP+4 software

32. March 21, 2007, PMG Announced: • Extending Move Update Requirement to Standard Mail at a frequency of 95 Days Prior to Mailing • For First-Class Mail, Increasing Frequency of Processing from 185 Days to 95 Days • Federal Register Notice Will be Published in April, 2007 • 18-Month Implementation for Date of Publication

33. Putting It All Together

34. Code address via CASSTM ZIP + 4® address matching software with DPV and LACSLINKTM 2. Code address via CASSTM ZIP + 4® address matching software with DPV and LACSLINKTM Did the address ZIP + 4 Match or DPV confirm? Y/N NO Send bad addresses to AEC Build mailing list 1 1. Build mailing list 2 4 3 5 NO Send badaddressesto AEC Bad addressfixed/ZIP + 4 coded? NO Did the address ZIP + 4match or DPV Confirm? YES YES 7 Update movers (NCOALINKTM)(pre-mailing update) 6 Suppress badaddresses frommailing list Apply ACSTM participant code to mail piece (post-mailing update) 8 Mail 9 Update address list withnew ACS information 10

35. Code address via CASSTM ZIP + 4® address matching software with DPV and LACSLINKTM NO Bad address fixed / ZIP + 4 coded? Y-N Suppress bad addresses from mailing list NO Send bad addresses to AEC Build mailing list 1 2 4 3 5 NO Send badaddressesto AEC Bad addressfixed/ZIP + 4 coded? NO Did the address ZIP + 4match or DPV Confirm? YES YES 7 Update movers (NCOALINKTM)(pre-mailing update) 6 Suppress badaddresses frommailing list Apply ACSTM participant code to mail piece (post-mailing update) 8 Mail 9 Update address list withnew ACS information 10

36. participant code to Apply ACS mail piece (post-mailing update) Code address via CASSTM ZIP + 4® address matching software with DPV and LACSLINKTM ! For crying out loud! Mail Did the address ZIP + 4 Match or DPV confirm? Y/N ) TM Update movers (NCOA LINK (pre-mailing update) Then update that address list with new ACS information…do NOT forget !! Build mailing list 1 2 4 3 5 NO Send badaddressesto AEC Bad addressfixed/ZIP + 4 coded? NO Did the address ZIP + 4match or DPV Confirm? if “Yes” YES YES 7 Update movers (NCOALINKTM)(pre mailing update) 6 Suppress badaddresses frommailing list Apply ACSTM participant code to mail piece (post mailing update) 8 Mail 9 Update address list withnew ACS information 10

37. JOB WELL DONE! Build mailing list 1 2 Code address via CASSTM ZIP + 4® address matching software with DPVTM and LACSLINKTM 4 3 5 NO Did the address ZIP + 4match or DPV Confirm? NO Send badaddressesto AEC Bad address fixed / ZIP + 4 coded? YES YES 7 Update movers (NCOALINKTM)(pre-mailing update) 6 Suppress badaddresses frommailing list Apply ACSTM participant code to mail piece (post-mailing update) 8 Mail 9 Update address list withnew ACS information 10

38. How Can You Succeed? For more information on USPS Addressing products • http://ribbs.usps.gov RIBBS - NCSC Products, Services & Publications • http://www.usps.com/ncsc usps.com – Address Quality Page • http://ribbs.usps.gov/files/mtac/annual Address Quality Methodologies - Best Practices • Contact the USPS National Customer Support Center @ • 1-800-238-3150 • Go to www.usps.com

39. Questions ???